This article summarizes news and events in Illinois, Indiana, Iowa, Michigan and Wisconsin. Read more ...

Residential foreclosures have become a growing concern in the lending industry. GMAC-RFC (Residential Funding Corporation), America’s largest private issuer of mortgage-backed securities and a leading warehouse lender, estimates that it loses over $50,000 per foreclosed home. According to the U.S. Census Bureau’s statistical abstracts, the number of nonfarm mortgage loans in foreclosure at year-end 2003 (the latest year for which information is available) was over 500,000. This translates into $25 billion in foreclosure cost for lenders.

Of course, lenders are just one stakeholder in the foreclosure process. What are the total costs associated with foreclosing on a home? Who is responsible for paying these costs? Are there alternatives to the foreclosure process? And if so, what are the advantages of using those alternatives? Read more ...

Asset building plays an integral role in alleviating poverty and bolstering financial security for individuals and families. Assets move families beyond living paycheck to paycheck and give them tools to plan for the future. But in order to improve asset building in the future, we first have to determine where we stand today. To do this, the Corporation for Enterprise Development (CFED), a nonprofit organization that works to promote economic opportunity, has created its most comprehensive tool yet to measure ownership and financial security, the Assets and Opportunity Scorecard: Financial Security Across the States (Scorecard). The recently released Scorecard provides a detailed picture of how the states are faring in both performance and policy. Read more ...

This article explores the demand for and the availability of financial products for Muslims who adhere to religious prohibitions against receiving and paying interest. This is an evolving area of consumer and small business finance, and the goal of this article is to provide an overview of the potential market for Islamic finance, to describe the organizations that currently provide these products, and to highlight some of the challenges of satisfying both religious tenets and government regulations. Two facets of financial products, asset financing, and investments, are addressed. Furthermore, the article identifies three types of organizations that offer Islamic financial products and services: financial entities, nonprofits, and for-profit ventures that sell models of Islamic finance products and consulting services to firms. Drawing largely on interviews with regulators, practitioners, and experts in the field, we find that the few financial entities that offer formal Islamic finance in the United States are often motivated by strong grassroots demand in their local service areas. These entities are often charting new territory in terms of product development and conformity with government regulations. Regulatory issues have not yet been tested on a large scale, and decisions as to whether a bank may offer an Islamic financial product are typically determined on a case by case basis. Read more ...

First Accounts: A U.S. Treasury Department Program to Expand Access to Financial Institutions

In 2002, there were almost 56 million individuals in the U.S. who did not have either a savings or checking account at a bank or other traditional financial institution. Additionally, over 83 percent of families without a bank account earn under $25,000. These families often use alternative financial services, including check cashing, payday loans, refund anticipation loans, and others, that provide convenience at high cost. A 2004 report estimated that these alternative financial services handled 280 million transactions, generating $78 billion in fee revenue. As a result, “unbanked” low-income workers who can least afford to pay more for basic services often do. They pay to cash checks, are subject to higher interest rates on credit, and pay higher fees and interest rates for consumer loans, auto loans, and home mortgages. This article describes First Accounts, a program designed to provide better financial alternatives for the “unbanked,” and highlights some insights from research on the Chicago-based First Accounts program. Read more ...

Sustainable Rural Development: The Role of Strategic Visioning, MAPPING the Future of Your Community Program

Rapid and widespread change in the world around us is affecting rural communities in dramatic and often unexpected ways. Leaders and residents of rural communities are continually challenged by the questions of how to nurture their communities through increasingly complex twenty-first century issues, how to lead change that produces the quality of life desired, and how to sustain the effort over time. No longer can rural communities expect that government agencies will provide for their needs, but instead, must look to the people and resources within their communities from which to build their future. Read more ...

On June 9, 2005, Governor Rod R. Blagojevich signed a landmark Payday Loan Reform Act that for the first time will regulate the payday loan industry in Illinois and strengthen protection to consumers, especially working families and members of the military against predatory and abusive practices. The Act became effective in December 2005.

“Payday loans are supposed to help working people cover unexpected costs and emergencies. They’re not supposed to break their bank accounts. We needed to do something about this, and we have achieved it,” said Gov. Blagojevich upon signing the law during a ceremony at the Sargent Shriver National Center on Poverty Law. The Governor was joined by elected officials, legislators, advocate organizations, and individuals who have been the victims of abusive loans. Read more ...